In a continuation of an unsettling trend, the tech industry is facing yet another wave of job cuts, further exacerbating the repercussions of widespread layoffs from the previous year. The year 2024 has already witnessed over 32,000 tech professionals losing their jobs, as reported by Layoffs, a startup dedicated to monitoring job cuts within the tech sector since the onset of the pandemic.
Snap Inc. recently joined the list of tech giants downsizing their workforce, with an announcement on Monday indicating a reduction of approximately 10%, equating to around 540 employees. This follows software company Okta Inc.’s declaration earlier this month that it would be shedding 7% of its workforce, impacting around 400 employees. The list of affected firms includes prominent tech industry players such as Amazon.com Inc., Salesforce Inc., and Meta Platforms Inc.
Roger Lee, founder of Layoffs, commented on the current scenario, stating, “Tech companies are still trying to correct for their over-hiring during the pandemic surge, given that the high-interest-rate environment and tech downturn have both lasted longer than initially expected.” Lee identified two major waves of job cuts in recent years, the first being the “early Covid” spike, occurring from the first to the second quarters of 2020, and the second being the ongoing “interest rate hike” effect, which started in the second quarter of 2022.
He noted that the layoffs in 2024 are typically smaller and more targeted compared to those in the preceding year. While economic factors primarily drive these layoffs, Lee also pointed out that many companies are citing the race for artificial intelligence (AI) talent as a contributing factor. As businesses shift their focus toward AI capabilities, they are reallocating resources accordingly.
CompTIA, an organization tracking employment trends in the tech industry, reported an increase of about 2,000 job postings related to artificial intelligence or requiring AI skills from December to January, totaling 17,479. Despite these layoffs, the tech industry continues to actively hire in other areas, with CompTIA recording 33,727 active job postings in January. This marks the most significant month-over-month increase in the past 12 months.
Bert Bean, Chief Executive Officer of staffing company Insight Global, expressed his perspective on the situation, saying, “I do feel like most of the layoffs have happened, and companies are going to start to rebound.” However, he emphasized the lingering uncertainty, predicting that the market will remain unstable for approximately the next two quarters, pending decisive action by the Federal Reserve to cut interest rates.